Elizabeth Warren and Suze Orman Call for Student Debt Reform

Career College Central Summary:

  • Senator Elizabeth Warren and personal finance expert Suze Orman teamed up Wednesday morning for a spirited, hour-long discussion about student loans, for-profit colleges and the staggering debt crisis facing tens of millions of Americans today.
  • The question of whether Warren will run for president in 2016 was defused right off the bat, when Orman jokingly announced her own candidacy. Warren remained silent on the issue throughout the panel discussion, hosted by Politico and Starbucks in downtown Washington, D.C., choosing instead to draw attention to her student loan reform bill, which was blocked by a Republican filibuster in June.
  • The bill would require the federal government and private banks to allow the roughly 25 million Americans, each of whom carry an average of $30,000 in student debt, to refinance their student loans at today’s lower interest rates.
  • It would also cap undergraduate loans at interest rates below 4%. The current interest rate for federal Stafford student loans is as high as 8%; private loan rates often top 14%. Warren and Orman argued that since Americans collectively carry more than $1.2 trillion in student debt alone—a sum that doesn’t take into account mortgages or other personal debt—they cannot buy houses or cars or make other purchases that would stimulate the economy.
  • Senate Republicans blocked another effort to bring the bill to vote on Tuesday. Warren promised Wednesday to “keep hitting at” it this term.Both Warren and Orman pointed out repeatedly that student loans, unlike any other type of loan, cannot be forgiven under any circumstances, including bankruptcy or death.
  • Those carrying student debt through retirement “will have their social security garnished,” Orman said, as an appalled Warren echoed her: “Your social security check gets garnished!” Americans who die with student loans often pass on that debt to surviving family members.

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TIME

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